Biden-Harris student debt relief plan is set back after lawsuits

Biden’s loan forgiveness plan would benefit students on an individual level, but may harm the economy in the long run, according to Gabriel Camera, an economics and finance professor at Chapman University. WikiCommons 

The U.S. Department of Education is no longer taking applicants for student loan forgiveness in reaction to federal lawsuits faced by President Joe Biden's debt relief program. 

Receiving over 26 million applicants since its launch in October, the student debt relief program aims to relieve up to $20,000 in debt for students earning less than $125,000 a year, according to a fact sheet released last month by the White House. 

In response to lawsuits from opposing parties, however, the plan was put on pause in November. The pending federal case has left students nationwide on edge, as the program could impact their futures.

While Biden initially released the program to make up for financial instabilities caused by COVID-19, many conservative voters worry that the economy would suffer more from the redistribution of funds. 

Gabriel Camera, an economics and finance professor at Chapman University, explained that since Biden has not shared how he plans to get the needed funds, it is hard to determine how the program could affect the economy. 

“The public is not sufficiently informed about these aspects. … There are very few elements that are given about this plan, so knowing how it fits into the bigger picture is really hard to tell,” Camera told The Panther. 

Camera also explains how this loan forgiveness could impact students on both college and high school levels. 

“In economics, we have something called adverse selection,” Camera said. “I may end up as a government attracting people that really don’t want to go to college … but they come in because they think they will have a discount on the expenditures that they have.”

Despite potential economic issues, the program could specifically benefit minority students. According to a fact sheet released last August by The White House, “the typical Black borrower who started college in the 1995-96 school year still owed 95% of their original student debt.” 

To many students, the program would determine their future in higher education. Evelyn Sechrist, a junior at Chapman studying communication, has planned to go to law school to become a public defender. She could potentially save $10,000 if the program is passed by the Supreme Court. 

Whether or not the program gets passed will influence Sechrist’s decision to get a higher degree. 

“I do want to go to law school, but part of me is like, ‘Well, if I have so much money to pay back, do I really want to do that?’” Sechrist said. “If I was able to get that 10 grand covered, that would be just such a relief.”

Sechrist plans to pay off her loans by working and receiving help from her family. If the program does go through, she said that her biggest relief would be less tension between her and her parents.

“They plan on paying it back, and I want to help them,” Sechrist said. “If there was less money to pay back, I feel like there’s less pressure.”

While the debt relief program may have a negative impact on the economy, it would benefit individual students and their families. 

“Selfishly, as a college student, I want it to pass,” Sechrist said. “That’s how it would work best for me.”

Despite the short-term gain that students today would receive, many argue that a long-term change is needed. Camera argues that the solution to student debt is not forgiveness, but a change in the education system itself. 

“There is already a problem with the budget in the U.S., and this is a recurring problem, which means that public spending is not properly planned,” Camera said. “Maybe universities can offer a little bit less in terms of services, but more in terms of content.”